The Chinese yuan logged a fifth week of gains amid broad optimism around the prospect of tariff relief tied to an interim trade deal between Beijing and Donald Trump.
It’s the best run for the currency since February of 2018.
Since November 1, the onshore yuan is up some 0.7%, while the gain over the entire five-week stretch sits at 2.2%. Earlier this week, the currency strengthened back through 7 for the first time since August, when the key psychological threshold was breached following Trump’s announcement of new tariffs.
Meanwhile, trade data for October surprised for the better. Although exports and imports still fell, the declines were less pronounced than expected.
Exports dropped just 0.9% YoY last month in dollar terms, much better than the 3.9% decline the market was expecting.
Imports fell 6.4%, which, while not good, was at least less bad than the 7.8% drop economists anticipated. Imports have now fallen for six consecutive months, underscoring ongoing concerns about domestic demand.
Speaking of domestic demand, car sales declined 6% from the previous year last month, the China Passenger Car Association said Friday.
It was the 16th month in 17 of falling sales.
That’s not exactly a surprise given the well-documented slump in domestic auto sales, but as Bloomberg notes, “the period known as ‘Golden September, Silver October’ is typically strong for carmakers as consumers like to make big-ticket purchases during the harvest season”.
Not so much this year, apparently.